As home prices and interest rates continue to rise, the number of middle-class Americans who can afford a home has fallen in many cities. Recent reports suggest middle-class buyers are being priced out of median priced homes in many cities. Among the most expensive metro areas, according to the National Association of Realtors®, are San Jose, Calif., San Francisco and Honolulu. Other data shows that only one in four homes for sale in New York and Los Angeles, and only one in seven in San Francisco, are within reach of those earning the city’s median household income.
NAR Chief Economist Lawrence Yun pointed out other roadblocks for today’s buyers, including difficulty qualifying for a mortgage and coming up with a downpayment. Yun says, “Price increases have been a double-edged sword; it’s been very good for owners or recent buyers because they’re immediately getting equity, but it has not been good news in terms of affordability for potential buyers.”
Speak with area Realtors® about local affordability. Seek out middle-class potential buyers and ask them how they are planning to purchase a home. Take a look at price data in your local area and compare today’s market with previous years. Has there been a change in home prices, affordability or interest rates?